India’s benchmark stock indices recorded their steepest monthly decline since March in September 2026, as rising oil prices, higher global interest rates and continued foreign investor selling weighed on market sentiment.
The Nifty 50 fell 6.1% during September, while the Sensex declined 5.8%. All 16 major sectors ended the month lower, with the information technology sector recording the biggest decline at 11.2%.
Foreign investors remained major sellers of Indian equities. They sold around $2.7 billion worth of Indian shares in September, taking their total outflows for 2026 to approximately $26.8 billion.
The broader global economic environment also added pressure. The US Federal Reserve raised its key interest rate in September, while central banks in Australia, Europe and Japan also increased borrowing costs. Higher US interest rates can reduce the appeal of emerging-market assets as investors may find dollar-denominated assets and bonds more attractive.
Surging oil prices further fueled concerns about inflation and the potential impact on India, which remains a major crude oil importer.
Analysts also pointed to a busy domestic initial public offering (IPO) market as another factor affecting liquidity, with capital being directed toward new share offerings while the broader market remained under pressure.
The decline also extended beyond equities, with the rupee and benchmark government bond losing ground during the month.
